Ecuadoreans Must Defend $18B Award at Nov. Trial

MANHATTAN (CN) – A trial will begin late this fall to determine the enforceability of an $18.6 billion judgment that an Ecuadorean court slapped against Chevron in February, a federal judge ruled.

A group of Ecuadorean natives say Chevron should pay to remediate environmental damage caused by its subsidiary, Texaco, during decades of drilling in the Amazonian rainforest. Well before the Lago Agrio court entered its Feb. 14 against Chevron, the oil giant condemned the proceedings there as fraudulent. In a bid to discredit and invalidate the verdict, Chevron filed multiple lawsuits on three continents against the natives, their attorneys, their consultants and the government of Ecuador. In Manhattan, where the bulk of the American litigation has occurred, U.S. District Judge Lewis Kaplan issued an injunction blocking collection of the judgment. Chevron has since appealed the Ecuadorean verdict and received a green light to sue the government of Ecuador at The Hague. Kaplan is also handling the federal racketeering lawsuit Chevron filed against Steven Donziger, the attorney who spearheaded the Ecuadorean lawsuit. Chevron says Donziger has tried to extort a multibillion dollar judgment so that he can collect a tidy sum in attorney’s fees. A month after filing in Feb. 1, Chevron asked Kaplan to bifurcate, or hold a separate trial on, a claim that seeks a declaration that the Ecuadorean judgment is unenforceable. Donziger blasted the “false and malicious allegations” that his “life work for the last 17 years is a fraud and akin to organized crime,” in a March 21 memo. He claimed that Chevron was trying to dodge facing a Manhattan jury on whether he could collect the judgment. “Neither version of Chevron’s bifurcation proposal can be squared with due process, fairness, or Donziger’s constitutional right to a jury trial,” the memo states. As with previous rulings in this case, Kaplan seemed unsympathetic to Donziger’s argument. In a 22-page opinion on Friday, Kaplan granted Chevron’s motion to hold an earlier trial on enforceability issues. He said Donziger’s due process will not be violated because it will “quite likely” be a jury trial. Noting a lack of briefing, Kaplan deferred ruling on whether a jury should hear a trial on Count 9. “For present purposes, it is sufficient to determine only that the neither party has established that a trial of Count 9 would be non-jury,” the order continues. “Absent such a showing, there is no Seventh Amendment issue.” Karen Hinton, a spokeswoman for the Ecuadoreans, said in an e-mail that the ruling reflects bias on the part of the judge. “It is clear from Judge Kaplan’s ruling that Chevron’s extortion charges are a ruse to obtain a favorable opinion on enforcement from a U.S. federal judge who continues to exhibit his bias against the Ecuadorians,” Hinton wrote. “The enforceability of this judgment is before an Ecuadorian Court of Appeals. It is outrageous that a U.S. Court is trying to stand between the Ecuadorians and justice in their own country. In their defense, their American lawyers will continue to insist upon a jury trial on all counts.” Donziger accused Kaplan of bias in a Feb. 28 memo and sought to remove the case to another judge’s docket. Kaplan denied the motion, writing that the colorful quotations attributed to him as evidence of bias were “selectively quoted and wrenched from context.” Chevron’s spokesman Kent Robertson said the company is “gratified” by Kaplan’s order, which sets the trial for Nov. 14. “The company is gratified that Judge Kaplan granted our bifurcation motion and is expediting Chevron’s declaratory relief claim to trial in November,” Robertson wrote in a statement. “We believe this it is a critically important step in redressing the travesty of justice that has occurred in Ecuador.”